Solar power producer Hindustan Cleanenergy, which has chalked out Rs 5,500-crore capex plan by 2016, has inked an MoU with Punjab to set up a 150-mw solar farm that envisages Rs 1,200 crore investment.

"We signed an agreement a couple of weeks ago with the Punjab government for a 150-mw solar farm. The project, which will be commissioned by December, 2015, will involve an investment of around Rs 1,200 crore," Hindustan Cleanenergy Chief Executive Rajya Wardhan Ghei told PTI.

On funding part, he said the company normally follows the 70:30 rule of debt-equity ratio. He also said normally, after all the approvals, it takes six months for them to commission a solar farm.

Hindustan Cleanenergy is a subsidiary of Hindustan Powerprojects in which the PE firm Blackstone India has a 33 per cent interest and the rest is with promoter Ratul Puri.

Ghei said the project will need about 750 acres and the farms could come up on government land spanning four districts of Mohali, Patiala, Ropar and Sangrur.

When asked whether the company has identified the land and secured them, he said the state is working on a policy under which it proposes to allow private energy developers to lease out the land from the government.

On the power purchase agreement, he said it will be signed after the land acquisition is done.

Ghei had earlier said he would take the company public with an IPO in the second half of the 2014 but refused to offer a clear timeline or guess valuation, though he said it could get a good valuation as it has made a cash profit of Rs 550 crore last fiscal.

"We will be hitting the capital markets this calendar year, though I cannot offer a clear timeline now. Having already invested Rs 5,500 crore into our solar power venture, we will be pumping in an equal amount by 2016 so that our generation capacity reaches 1 gw," Ghei had said last week.